THE Institute of Chartered Account-ants in Australia is urging banks to help small-to-medium enterprises meet the requirements of GST Pay-As-You-Go and offer direct offset arrangements to facilitate better cash flow management.
ICAA SME Committee spokes-person Sue Prestney said small and medium enterprises that did not rely on debtors would require assistance to ensure GST collected on sales was not absorbed into general business revenue.
“Businesses that aim to operate separate accounts to manage their GST collections will not be maximising the cash flow benefits to the business, despite their vigilance in adhering to the new taxation system,” Ms Prestney said.
“It is a shame that businesses which impose self-discipline in their GST cash flow management are not able to maximise the benefits of such an activity.
“In this situation, the banks are in a unique position to provide SMEs with direct offset arrangements against their operating overdraft to attach to their separate GST accounts,” she said.
Ms Prestney said this would effectively create a safety net for SMEs when reconfiguring their business processes to meet the new taxation requirements.
“Such an undertaking by the banks will ensure the survival of their own customers and will assist to underwrite the general stability of the SME community in Australia,” she said.
